| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.2% to 0.2% | 0.2% | 0.2% |
| Year over Year | 1.7% | 1.7% to 1.7% | 1.7% | 1.7% |
| HICP - M/M | 0.2% | 0.2% to 0.2% | 0.2% | 0.2% |
| HICP - Y/Y | 1.7% | 1.7% to 1.7% | 1.8% | 1.7% |
Highlights
Final consumer prices for June saw no change from their preliminary reading, coming in at 0.2 percent month-on-month and 1.7 percent year-over year, up from May's result of 1.6 percent year-on-year.
The monthly HICP rose 0.2 percent on the month, matching the preliminary reading. The annual rate was 1.8 percent, up from June's preliminary estimate of 1.7 percent, and still below the ECB's target.
June's rise in annual CPI rate was partly due to quickened growth in prices of unprocessed food products (from 3.5 percent to 4.2 percent) and transport-related services (from 2.6 percent to 2.9 percent), and the easing of the decline in prices of durable goods (from minus 1.1 percent to minus 0.8 percent). This offset the decline in the prices of energy (from 29.3 percent to 22.6 percent).
Core inflation increased from 1.9 percent to 2.0 percent in June. This latest update takes the RPI to minus 40 and the RPI-P to minus 46, meaning that economic activity in Italy is falling short of market expectations.
The monthly HICP rose 0.2 percent on the month, matching the preliminary reading. The annual rate was 1.8 percent, up from June's preliminary estimate of 1.7 percent, and still below the ECB's target.
June's rise in annual CPI rate was partly due to quickened growth in prices of unprocessed food products (from 3.5 percent to 4.2 percent) and transport-related services (from 2.6 percent to 2.9 percent), and the easing of the decline in prices of durable goods (from minus 1.1 percent to minus 0.8 percent). This offset the decline in the prices of energy (from 29.3 percent to 22.6 percent).
Core inflation increased from 1.9 percent to 2.0 percent in June. This latest update takes the RPI to minus 40 and the RPI-P to minus 46, meaning that economic activity in Italy is falling short of market expectations.
Market Consensus Before Announcement
Forecasters expect no revision from the flash at 0.2 percent on month and 1.7 percent on the year for June.
Definition
The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI provide widely used measures of inflation. A provisional estimate, with limited detail, is released about two weeks before the final data are reported.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries such as the Italy where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, Italy's interest rates are set by the European Central Bank.
Italy like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies. The core CPI, which excludes fresh food, is usually the preferred indicator of short-term inflation pressures.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
Italy like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies. The core CPI, which excludes fresh food, is usually the preferred indicator of short-term inflation pressures.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
